A5380

An Act concerning transportation projects funded through the local aid program, amending P.L.1995, c.108, and supplementing Title 27 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 9 of P.L.1995, c.108 (C.27:1B-25.1) is amended to read as follows:

9. a. Aid to counties and municipalities administered by the department may, at the discretion of the commissioner, be disbursed to any individual county or municipality on a grant basis or on a cost reimbursement basis. Awards shall be made pursuant to the following schedule: (1) the department shall distribute an aid application solicitation letter to each county and each municipality by April 1st of each year; (2) each county and each municipality shall submit an application for funding by June 30th of each year; (3) the department shall distribute an award letter to each county and each municipality by October 1st of each year; and (4) the department shall execute an agreement with each county and each municipality concerning the project for which the aid is allotted to that county or municipality within 90 days from the date that the department distributes the award letter to the county or municipality pursuant to paragraph (3) of this subsection or by December 31st of each year, whichever is earlier.

Distribution of the portion of the grant provided initially to a county or municipality may be contingent on its performance in spending prior grants. Failure to award construction or other approved contracts for 100 percent of a county's allotment within three years of notification by the department of that year's allotment , or failure to award construction or other approved contracts for any percentage of a county's allotment within one year of the fully executed agreement for that year’s allotment pursuant to paragraph (4) of this subsection, shall result in the allotment being immediately rescinded or the funds returned to the department, as applicable, or in the event such funds are not immediately returned, deducted by the department from future allocations of aid to such county , except as provided in subsection b. of this section. Any such funds may be reallocated by the commissioner on a grant basis or a cost reimbursement basis to such other counties or municipalities as the commissioner shall so determine. Failure to award construction or other approved contracts for 100 percent of a municipality's allotment within two years of notification by the department of that year's allotment, or failure to award construction or other approved contracts for any percentage of a municipality’s allotment within one year of the fully executed agreement forthat year’s allotment pursuant to paragraph (4) of this subsection, shall result in that year's allocation being immediately rescinded , except as provided in subsection b. of this section. Any such funds may be reallocated by the commissioner on a grant basis or a cost reimbursement basis to such other counties or municipalities as the commissioner shall determine.

b. An allotment provided to a county or municipality shall be rescinded, returned, or deducted from future allocations as a result of a county’s or municipality’s failure to award construction or other approved contracts for any amount of the allotment within one year of the fully executed agreement for that year’s allotment as provided in subsection a. of this section, except that this one-year requirement shall be extended if a designated financial officer for the county or municipality certifies to the department that the project will not begin construction during the required time frame due to one of the following exceptions:

(1) the allotment will be aggregated with future funds for the purpose of completing a specific project;

(2) a permit needed for completion of the project has not been issued due to a delay in the permitting process;

(3) the acquisition of an interest in State-owned land needed to complete the project is delayed due to the divestment of a deed restriction;

(4) the project requires a utility to be relocated; or

(5) a catastrophic event occurs and results in a declaration of a state of emergency. The commissioner shall determine which events are considered catastrophic for purposes of this paragraph.

c. A designated financial officer for a county or municipality submitting a certification pursuant to subsection b. of this section shall provide proof that the project meets one or more of the exceptions provided in subsection b. of this section and shall certify that a construction or other approved contract will be awarded promptly upon resolution of the cause of the delay. The commissioner shall determine the proof necessary to claim an exception under subsection b. of this section; provided that:

(1) if a designated financial officer certifies that the allotment will be aggregated with future funds for the purpose of completing a specific project, the designated financial officer shall provide to the department the specific project for which the allotment will be used and an expected timeline for completion of the project. The allotment shall not be aggregated until the department approves such aggregation;

(2) if a designated financial officer certifies that a permit needed for the completion of a project has not been issued due to a delay in the permitting process, the designated financial officer shall provide to the department the specific permit application number; or

(3) if a designated financial officer certifies that acquisition of an interest in State-owned land is delaying the completion of a project due to the divestment of a deed restriction, the designated financial officer shall provide to the department the block and lot designation of such land.

(cf: P.L.2012, c.13, s.10)

2. (New section) All appropriations or authorizations made by the Legislature and allocated by the commissioner, under the local aid program, pursuant to section 25 of P.L1984, c.73 (C.27:1B-25), shall include the following limitations on grant recipients:

a. local government entity grant recipients shall be prohibited from using local aid program funds to support the work of any local government entity’s employees on any construction projects funded, in whole or in part, out of funds from the local aid program;

b. the construction contracts for all projects funded, in whole or in part, out of funds from the local aid program shall be made and awarded in accordance with the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.);

c. for all projects funded, in whole or in part, out of funds from the local aid program, each bidder on a construction contract valued at more than $500,000 shall be prequalified by the New Jersey Department of Transportation; and,

d. a grant recipient under the local aid program shall be permitted to expend up to 10 percent of its aid allotment in the fiscal year beginning July 1, 2018 for design purposes, and up to five percent of its aid allotment in the fiscal year beginning July 1, 2019 and every fiscal year thereafter for such purposes.

3. This act shall take effect immediately.

STATEMENT

This bill revises requirements imposed upon the use of grant funds received by counties and municipalities through the transportation local aid program.

The bill provides a schedule for awarding transportation local aid to counties and municipalities. Specifically, the bill requires: (1) the New Jersey Department of Transportation (department) to distribute an aid application solicitation letter to each county and each municipality by April 1st of each year; (2) each county and each municipality to submit an application for funding by June 30th of each year; (3) the department to distribute an award letter to each county and each municipality by October 1st of each year; and (4) the department to execute an agreement with each county and each municipality concerning the project for which the aid is allotted to that county or municipality within 90 days from the date the department distributes the award letter or by December 31st of each year, whichever is earlier.

The bill requires counties and municipalities to begin expending aid allotments within one year from the date of the fully executed agreement for that year’s allotment. The bill provides that an allotment is to be rescinded, returned, or deducted from future allotments as a result of a county’s or municipality’s failure to award construction or other approved contracts for any amount of the allotment within this time frame, except that the one-year requirement is to be extended if a designated financial officer of the county or municipality certifies to the department that the project will not begin construction because: (1) the allotment will be aggregated with future funds, as permitted by the department, for the purpose of completing a specific project; (2) a permit needed for completion of the project has not been issued due to a delay in the permitting process; (3) the acquisition of an interest in State-owned land needed to complete the project is delayed due to the divestment of a deed restriction; (4) the project requires a utility to be relocated; or (5) a catastrophic event occurs and results in the declaration of a state of emergency. A designated financial officer is required to provide proof that the project meets one or more of these exceptions and is to certify that a construction or other approved contract will be awarded promptly upon resolution of the cause of the delay.

The bill also: (1) prohibits a local government entity from using local aid program funds to support the work of a local government entity’s employees on local aid construction projects funded from local aid funds;

(2) requires construction contracts for projects funded out of funds from the local aid program to be bid in accordance with local public contracts law;

(3) requires all bidders on local aid program funded construction contracts valued at more than $500,000 to be prequalified by the department; and

(4) permits local aid program grant recipients to use 10 percent of their awards on design costs in fiscal year 2019, and five percent of their awards on design costs in fiscal years 2020 and beyond.